Genes are major contributors to many psychiatric diseases, but their mechanisms of action have long seemed elusive. To date, we have evidence of association with schizophrenia in our family datasets of at least the following genes: COMT, DTNBP1, MUTED, EAA1, MRDS1, GAD1, DISC1, FEZ1, CITRON, NDE1, NRG1, PIK3d, ErbB4, DLG4, LIS1, MHTFR, DRD2, CAPON, PPP1R1B, DAARP, GRM3, CHRNA7, KCNH2, SREB2, PRODH, CAMKIIa, AKT1, FGF20, RELN1, and RCCX. Our dataset consists of individuals from over 750 families and case/control datasets of over 650. The unique aspects of our dataset, which may explain the strength of the genetic associations that have emerged, is that every subject, both cases and controls, are evaluated extensively with structured on sight interviews by the same clinicians who have worked together on this project for over ten years. As characterization of single genetic variants rapidly proceeds, research increasingly turns to dissecting gene-gene and gene-environment interactions. Our strategy for characterizing and mapping gene effects in brain with cognitive and neuroimaging assays enables us to better define intermediate phenotypes. Here we outline recent advances of linking genes to structural and functional variation in brain systems related to cognition and emotion. One study examined genotype effect of catechol-o-methyltransferase (COMT) Val158Met on corticolimbic circuitry and functional connectivity. We found that Met/Met subjects had the ability to focus attention on relevant stimuli while inhibiting interference from other stimuli. This may be of great advantage during working memory (WM) task, but may have deleterious effects in environments with multiple stimuli requiring rapid and flexible processing. Another study evaluated COMT and GRM3 and examined their combined effects on dissociable components of the WM network. We found an epistatic interaction of these genes on the engagement of prefrontal cortex. GRM3 genotype was associated with inefficiency and altered prefrontal coupling on the background of COMT Val. As we know, abnormalities in dopamine (DA) neurotransmission contribute to psychiatric disorders. It has been shown that a network of brain regions is involved in performance of declarative and recognition memory tasks and this network, hippocampus and VLPFC, is modulated by DA. Regulation of DA signaling and neurotransmission is critically affected by COMT. We examined the effect of COMT Val158Met on function and coupling during recognition memory. There is compelling evidence that DA is an important modulator of hippocampal and prefrontal cortical interaction. This suggests that individual differences in responsivity and connectivity related to genetic modulation of DA, is a mechanism accounting for some individual differences in recognition memory performance. We also examined the effects of the PACAP gene on neurobiological traits related to risk for schizophrenia (SCZ). PACAP is a neuropeptide with neurotransmission modulating activity. We found an allele is overexpressed in patients showing an association with reduced hippocampal volume and poorer memory performance. We generated mice lacking the PACAP gene and observed abnormal behaviors, like elevated locomotor activity, which were reversed by treatment with an antipsychotic. These data suggest that alterations in PACAP signaling may contribute to the pathogenesis of SCZ.[unreadable] [unreadable] Our examination of transcripts, protein processing and expression has resulted in several findings. One study of DA- and cAMP-regulated phosphoprotein (DARPP-32) we identified a common haplotype, which predicts mRNA expression in postmortem human brain. This haplotype is associated with enhanced performance on several cognitive tests and imaging revealed an impact on neostriatal volume, activation, and functional connectivity of PFC. We use postmortem brain to focus on postnatal developmental changes. We examined COMT enzyme activity and protein expression in the PFC in 6 age groups of normals. We found a significant increase in COMT enzyme activity from neonate to adulthood which is paralleled by increases in protein expression. COMT protein expression is related to the Val158Met genotype. These increases may reflect changes in the PFC dopamine system and stresses the importance of COMT for PFC dopamine regulation during maturation. We also examined the DISC1 gene. DISC1 is the result of a balanced molecular translocation, which segregates with major mental disorders like SCZ, bipolar disorder and major depressive disorder (MDD). Our association study of DISC1 with MDD and SCZ found the risk allele, Cys704 associated with increased risk of developing MDD. Ser704Cys variation impacts brain morphology in normals and in primary neuronal culture, knockdown of cellular DISC1 protein resulted in suppression of ERK and Akt modification, whose signaling pathways are implicated in MDD. A possible biological mechanism of MDD is associated with lower biological activity on ERK signaling. [unreadable] [unreadable] Many human genes are known to produce more than one protein isoform through various molecular events. The use of multiple DNA replication start sites (promoters) is a frequent mechanism for generation of isoforms that provide tissue/cell type specificity, developmental-stage specificity, and allows for diverse functional properties of a gene. Neuregulin 1 (Nrg1) has nine alternative promoters. Genetic variations in promoters can contribute to genetic diseases by creating entirely new transcripts from any given gene. Such mechanisms may underlie the pathogenesis of complex diseases like SCZ. Recently, altered expression of a novel isoform (type 4) in the brain has been associated with schizo-related genetic variants. We isolated and characterized NRG1 type 4 DNA from adult and fetal human brain and identified a novel splice variant. We found a NRG1 protein representing a putative type 4 proprotein which is exclusively expressed in adult and fetal brain. Nrg1 type 4 expression is higher in the fetal brain and may have an important functional role during early brain development mediated through NRG1s effects on neurogenesis, neuronal migration, cell differentiation and synapse formation, and the regulation of neurotransmitter function. The fact that expression is brain-specific may be valuable in terms of possible therapeutics of NRG1 type 4 in SCZ. Nrg1 plays an important role in oncogenesis, and is overexpressed in various cancer tissues. However, we did not detect NRG1 type 4 in breast tumor and neuroblastoma cell lines. This absence, when juxtaposed to increased NRG1 type 4 associated with risk for SCZ, may contribute to the reduced incidence of cancer in patients SCZ and their relatives. This convergent pattern suggests that genetic regulation of type 4 may have a dual effect of protecting against cancer while increasing risk for SCZ. We have shown that type 4 represents a novel, translated, developmentally regulated, brain-specific isoform. We also show that a NRG1 promoter mutation, which impacts risk, is functional and selectively affects transcriptional levels of the type 4 isoform, providing a mechanism for the functional associations. Lastly, recent identification of NRG1 receptor, ErbB4 as a candidate SCZ risk gene, suggests that other molecules in the NRG1 pathway may also be involved. It has been shown that a molecular mechanism contributing to the genetic association of NRG1 with SCZ involves altered transcriptional regulation of a novel variant of the gene. We examined ErbB4 splice variant gene expression in hippocampus and DLPFC. ErbB4 splice patterns remain unaltered in hippocampus of SCZ, however we show an increase in expression of only the splice variant containing exons 16 and 26 in DLPFC in SCZ, suggesting that an ErbB4 receptor with exons 16 and 26 domains is preferentially upregulated in the disea